WORLD TRADE  
ORGANIZATION  WT/REG201/4 
26 November 2008 
 
 (08-5807) 
Committee on Regional Trade Agreements Original:   English/French 
  
 
FREE TRADE AGREEMENT BETWEEN THE EFTA STATES AND TUNISIA 
 
Questions and Replies
 
  
 The following communication, dated 25 November 2008, is being circulated at the request of 
the delegations of the EFTA States and Tunisia.   This document reproduces the questions addressed to the Parties and the responses submitted. 
 
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Questions from the delegation of Chinese Taipei
 
 General Provisions 
 
1. According to paragraph 5 of the WTO Secretariat’s Factual Presentation and the 
Preamble and Article 3 of this Agreement, we know that when ratifying the Agreement, Norway 
(one of the EFTA States) exempted the territo ry of Svalbard from the application of the 
Agreement with the exception of trade in good s in accordance with Article 3 and Annex 1. 
 (i) Why does Norway want to exempt Svalbard from the application of the 
Agreement? In addition, what kind of special status does Svalbard have in 
Norway? 
 
 (ii) Is Svalbard also exempted from th e application of the European Free Trade 
 Agreement within the EFTA? 
  The Svalbard archipelago (formerly Spitsbergen ) is an integral part of the Kingdom of 
Norway.  According to the provisions of the Treat y concerning the Archipelago of Spitsbergen of 
9 February 1920, the nationals of Parties to the Treaty are entitled to equal treatment in the 
archipelago in a number of respect s, e.g. in trade in goods.  Norw ay has traditionally exempted the 
territory of Svalbard from the application of its free trade agreements, as otherwise it could be argued 
that the rights deriving from the agreement could be ex tended to the nationals of all the Parties to the 
1920 Treaty.  The same applies to the EFTA Convention in respect of Annex U thereof.  Safeguards  2. As regards bilateral safeguards, paragraph 44 of the Factual Presentation and Article 
18.1 of this Agreement state that safeguard measures can be adopted when imports from 
another Party constitute a substantial cause of serious injury to the domestic industry of like 
products, or of serious disturbances in any sector of the economy, or difficulties which could bring about a serious  deterioration in the economic situation of a region of the importing Party. 
We would appreciate some further clarification as follows: WT/REG201/4 
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   (i) Why were these conditions chosen to be used in the bilateral safeguard? 
  (ii) What is the definition of “substantial cause”, and the criteria used to justify this 
condition? 
 
 (iii) How do you explain the situations of “serious disturbances in any sector of the 
economy” and “difficulties which could bring about a serious deterioration in the economic situation of a region of the importing Party”? What are their criteria for justification? 
 
 (iv) What is the difference between these conditions and the requirement used in 
Article 2 of the Agreement on Safeguards, “… under such conditions as to cause…a serious injury to the domestic industry,” and what are the comparative 
benefits of using the former? 
 
 Firstly, it must be emphasized that the text concerning the bilateral safeguard within the 
context of the Tunisia-EFTA Agreement is based on  the text of Article XIX of the GATT 1994 and 
the WTO Agreement on Safeguards.  Pursuant to  Article 18 of the Tunisia-EFTA FTA, safeguard 
measures are indeed adopted on the basis of the relevant aforementioned GATT and WTO provisions. 
  The requirement that causality be essential reflect s the preferential relationship created by the 
FTA and ensures that an adequate relationship of cause and effect ex ists between imports and injury, 
disturbances or difficulties.   The main criterion for imposing emergency measures on certain imports relates to the 
conditions that give rise to serious injury to the domestic industry of like products.  Article 18.1 
provides for other situations in which a bilateral saf eguard measure may be applied, providing that all 
requirements are met.  These situations concern "serious disturbances in any sector of the economy" and "difficulties which could bring about serious dete rioration in the economic situation of a region of 
the importing Party".  There are no lists of specific criteria to take into consideration when assessing 
these situations. 
 
Questions from the delegation of Japan
 
 Import duties and charges – General provisions  3. In Paragraph 14 of the Factual Presentation  (WT/REG201/3), it is described that as 
agreed in Annex IV, Tunisia grants industrial good s originating in the EFTA States treatment 
no less favourable than that afforded to tho se originating in the European Community;  and 
that should any change in the treatment of the EC occur, Tunisia would notify the EFTA States 
and provide them the opportunity to negotiate  any improved treatment under the Agreement.  
(i) Has any change in the treatment of the EC occurred and has any notification 
been made?  If so, what are the changes?  
Since the entry into force of the association agreement establishing a free-trade area between 
Tunisia and the European Union, no changes have  been made either to the provisions of the 
agreement or to the concessions exchanged between the two parties. 
(ii) From the sentences cited above, we understand that EFTA States are entitled to 
receive treatments from Tunisia as favourable as those the EC receives 
regarding export of industrial goods to Tunisia.  However, we also understand 
that negotiations are necessary.  What are the purposes of these negotiations?   WT/REG201/4 
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  Following communication with the WTO Secretaria t, we wish to point out an error in 
paragraph 14 of the Factual Presentation.  The Tunisia-EFTA FTA provides that Tunisia grants 
industrial products originating in EFTA States, c overed by Annex IV,  treatment no less favourable 
than that afforded to like products originating in the European Communi ty.  Tunisia has also 
undertaken to promptly notify the EFTA States of d ecisions relating to any change in the treatment 
afforded to the European Community for the products listed in paragraphs 1 to 4 of the Annex.  The 
Joint Committee will adopt the necessary amendmen ts to the said Annex without delay.  No 
negotiations are necessary.   
Import duties and charges – Agricultural Products (APs) 
 
4. With reference to Paragraph 19 of the Fact ual Presentation, could the Parties provide 
us with updated information on periodic consultations?  
Tunisia and the EFTA States have agreed to review the development of their trade in 
agricultural products within the framework of thei r respective agricultural policies and international 
obligations through periodic consultations aime d at finding appropriate solutions and possibly 
increasing concessions to improve bilateral trade relati ons.  So far, no such consultations have been 
held.  
Questions from the delegation of the United States 
 
 
Goods liberalization   
5. According to Annex 1 of the Factual Presentation, Table A.1:  
 • Iceland
 eliminates duties on 93.6% of all tariff lines and 100% of imports from Tunisia 
under the agreement.  However, though 100% of industrial goods tariffs are duty-free, only 
70.2% of agricultural tariffs are duty-free under the agreement. 
• Norway  eliminates duties on 90.3% of all tari ff lines covering 100% of imports from 
Tunisia under the agreement.  However, though 99. 7% of industrial tariffs are duty-free, only 
55.2% of agricultural tariff lines are duty-free under the agreement. 
• Switzerland  eliminates tariffs on only 80.1% of all tariff lines covering 98.9% of imports 
from Tunisia under the agreement.  However, th ough 99.7% of industrial goods are duty-free, 
only 21.9 % of agricultural lines are duty-free under the agreement. 
 Similarly, according to Annex 1, Table A.2, Tunisia  provides duty-free access to only 
77% of its tariff lines.  However, though 99.3% of industrial products are duty-free, only 1.7% 
of its agricultural tariffs are duty-free under th e agreement. While there appears to be little 
trade between Tunisia and Iceland and Tunisia and Norway, only 71% of Tunisia’s imports 
from Switzerland (based on value) become duty -free under the agreement (see page 7, chart D).  
(i) How do the Parties explain the highly  disproportionate liberalization between 
the industrial and agricultural sectors?  
(ii) Could the Parties please explain ho w their tariff elimination commitments 
achieve the “substantially all trade” st andard set out in GATT Article XXIV?  
Response from Tunisia  WT/REG201/4 
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  Tunisia and the EFTA States undertook to establish a free trade area in accordance with 
Article XXIV of the GATT 1994.  So far, this fr ee trade area covers industrial products (HS Chapters 
25 to 97) other than the products listed in Annex II, and "processed agricultural products" (such as are 
defined in Protocol A of the Agreement) a nd "fish and other marine products" (Annex III). 
Under the Agreement, EFTA countries must abolish customs duties on the products in 
question upon the entry into force of the Agreemen t, and Tunisia will gradually eliminate them over a 
three-year transition period.  
Three "bilateral agricultural protocols" have been concurrently concluded between Tunisia 
and Iceland, Norway, and Switzerland/Liechtenstein. 
According to Article 4 of the Agreement, the agricultural protocols form part of the 
instruments establishing a free trade area between the EFTA States and Tunisia and they all provide 
for a strict parallelism with the Agreement with  respect to entry into force and duration. 
The "bilateral agricultural protocols" are b ased on a mutual exchange of concessions and 
cover a certain number of products classified in HS  Chapters 01 to 24, within the framework of a 
positive list. 
We would thus point out the absence of a defi nition, one generally accepted by the Members, 
of "substantially all trade". 
On the basis of achievements in the 2002-2004 pe riod prior to the signing of the Agreement, 
Tunisia and the EFTA States have proceeded as follows: 
- Free trade arrangements in respect of indus trial products (HS Chap ters 25 to 97) other 
than the products listed in Annex II, a nd "processed agricultural products" (such as 
are defined in Protocol A of the Agreem ent) and "fish and ot her marine products" 
(Annex III) as indicated above;  and 
- special treatment for agricultural produc ts, with the Parties to the Agreement 
periodically holding consultations to find appropriate solutions and, if need be, 
broaden concessions with a view to improvi ng bilateral trade relations, within the 
framework of their respective agricultura l policies and international obligations. 
In any case, it should be noted that non-agri cultural products represent 82.3 per cent and 
agricultural products 17.7 per cent of trade for the above-mentioned period. 
EFTA's response
 
Liberalization of trade in the Agreement is the outcome of negotiations aimed at finding a 
balance between the specific interests and th e sensitivities of the Parties concerned. 
We would emphasize the absence of a definition,  one generally accepted by the Members, of 
"substantially all trade".  The "substantially all tr ade" standard concerns "trade", not imports and 
exports considered separately, and Article XXIV  does not lay down any obligation to liberalize 
individual products or to liberalize an entire sector  completely.  For these reasons, the EFTA States 
believe that the FTA achieves the "substantially a ll trade" standard set out in GATT Article XXIV. 
(iii) Please provide the average duty rate by  HS chapter and HS section for the lines 
that remain dutiable.   WT/REG201/4 
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  It is not possible to include the average cu stoms duties by HS chapter and HS section as 
specific customs tariffs and in-quota duties used  in several tariff lines are excluded from the 
calculations. 
Government Procurement 
 6. According to paragraph 60 of the Factual Presenta tion, "[t]he Parties restate their objective to 
reciprocally and gradually liberalize their public procurement markets".   
 
(i) Do the EFTA countries cover the sa me government procurement under the FTA 
as they cover under the WTO Agreement on Government Procurement? 
(ii) Please describe the government procu rement that Tunisia is covering under the 
FTA? 
Government procurement under the FTA is that defined in Article 1 of Decree No. 3158 of 
17 December 2002 regulating government procuremen t in Tunisia, according to which government 
procurement is in the form of written contracts, awarded by the public buyer with a view to the 
execution of public orders. 
Contracts for the concession of public services, contracts of association, group contracts, 
subcontracting, or assistance contracts concluded be tween the public buyer and other partners with a 
view to the execution of a public or private orde r do not constitute governme nt procurement within 
the meaning of Decree No. 3158. 
Within the meaning of that Decree, a public bu yer is considered to be the State, local 
communities, public establishments, non-administrati ve public establishments and public enterprises.  
Public orders are considered to be the execution of works, the supply of goods or services, and the 
conduct of studies pertaining to the order in question.  
(iii) Please describe how the FTA provides for the gradual liberalization of the public 
procurement markets of the Parties. 
The liberalization of the public procurement markets is provided for under Article 30 of the 
FTA between the EFTA States and the Tunisian Republic , which stipulates that "[t]he Parties shall set 
as their objective a reciprocal and gradual liberalisation of public procurement markets".  The modalities for implementing this objective will be defined in common agre ement between the two 
parties involved. 
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